Rinehart's Fairfax move shows wealth of WA

1 Feb 2012, 6:38 pm   -   Source: AAP
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Western Australia is crowing after another of its industrial barons made a huge investment in an east coast media house.

Western Australia has touted the wealth of its industry barons, after one of the state's mining billionaires Gina Rinehart spent almost $200 million increasing her stake in publisher Fairfax Media.

Premier Colin Barnett used the move by the nation's wealthiest person to highlight the economic power of the resources boom state, saying more national businesses were going to be owned or have significant shareholdings by West Australians.

"Little old Wesfarmers bought Coles, Kerry Stokes has bought Channel 7 nationally, now maybe Gina Rinehart's going to own Fairfax," he told reporters on Wednesday.

"The rest of Australia get used to it. This is where the money is."

Ms Rinehart's raid on Fairfax lifted her ownership of the media group to just under 15 per cent, from 4.9 per cent, encouraging other investors into the stock, which soared by 10 per cent.

The investment makes Ms Rinehart the largest shareholder in the company, which publishes The Age, The Sydney Morning Herald and The Australian Financial Review and owns a string of radio stations.

It also entitles her to a seat on the board.

Her motivation was not clear on Wednesday, but the range of speculation included that she was seeking more influence in the national media, or just making a strategic financial investment outside the mining sector.

Ms Rinehart also owns 10 per cent of Ten Network and is a director of the television broadcaster.

Communications Minister Stephen Conroy said although Ms Rinehart's Fairfax push was not unlawful, it did throw a spotlight on diversity in the media sector.

"It has always been the case in Australia over my lifetime in politics that a small number of families have had a controlling interest in the majority of the media in this country," he told ABC radio.

"Clearly she is seeking to exert her influence.

"But is she breaking the law? No."

Ms Rinehart has campaigned against Labor's mining tax and criticised the imposition of a carbon emissions tax. Both are due to come into effect on July 1.

Last July, the government set up a convergence review to study how to diversify opinion and ownership in the media.

The review - which made a draft recommendation that a public interest test be applied to any major transaction in the media - will deliver its final report to Senator Conroy in late March.

Greens communications spokesman Scott Ludlum said the political views of an individual should not prevent them from buying stakes in media companies.

But he argued Ms Rinehart's move was against the public interest.

"Bias and the commercial influence only really matter when you've got strong concentration of ownership as we do in Australia," he told AAP.

Media analyst Peter Cox said Ms Rinehart probably wanted to increase her influence in national affairs.

"There's no way you'd be buying into either Ten or Fairfax as a financial investment for the future in the media," he told ABC radio.

Federal opposition treasury spokesman Joe Hockey was untroubled by Ms Rinehart's decision, saying Fairfax had a strong board and editorial independence.

"It arguably does not matter who owns the media company," he told ABC radio.

"Gina Rinehart is a good person and a good Australian."

Fairfax shares closed up 7.5 cents, or 10.14 per cent, at a three-month high of 81.5 cents on Wednesday.

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